The conflict between lifetime gifts and gifts in Wills, the latest

There is a presumed intention where parents, for example, leave a child a share or sum by Will and then make a significant lifetime gift of a sum to that child. The Court presumes that a parent would not intend to benefit one child twice to the detriment of the other(s). The lifetime gift is regarded as a payment on account of the sum or share in the Will with the result that the legacy reduces to the extent of the lifetime gift.

In order for the presumption to be relied upon, the lifetime gift must be such as ‘to establish the child in life’ or make ‘provision’ for them.

The rule against double portions, as it’s called, necessitates an intention from the parent to establish the child in life or make provision, otherwise  the lifetime gift is ‘pure bounty’, ‘spontaneous bounty’ or a ‘mere gift’ or is directed at meeting  a particular moral obligation.

The leading case of Cameron determined that the rule also applies where gifts are made by an attorney on behalf of a person who has lost capacity and the gift can be paid to someone else on behalf of the child so long as it benefits the child.

In a High Court case this year it was decided that a lifetime gift by the deceased to his two daughters did not fall within the rule as it was to repay them for the sums of money that they had already spent taking care of him and in part would help finance the inevitable future costs of the deceased’s care and housing with them.

Other earlier cases follow similar themes which make a contemporaneous statement at the time of making a substantial lifetime gift potentially invaluable to help prevent confusion and upset or, worse still, time consuming and expensive litigation.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

The Legal 500 - The Clients Guide to Law Firms

UK Chambers logo

Best Companies - One to watch logo

Cyber Essentials Certification Logo